2015 Intergraf European Book Market Report · 6 2015 INTERGRAF EUROPEAN BOOK MARKET REPORT In any SWOT analysis, pairing Strengths/Weaknesses with Opportunities/Threats shows that

2015 IntergrafEuropean Book Market Report

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2015 INTERGRAF EUROPEAN BOOK MARKET REPORT

2015 Intergraf European Book Market Report a strategic and economic approach for European book printers

Intergraf is the main organisation representing the interests of the graphic industry in Europe, comprising 22 national printing federations in 20 countries. Intergraf works with European Institutions to promote, protect and enhance the sector’s competitiveness through lobbying, informing and networking.

Intergraf has for some years held an annual conference for bookbinders and print finishers, and for the first time held a strategic workshop for book printers on 28 September 2015 in Germany. This workshop was designed to help printers better assess their market situation and provide them with ideas of what they can do to improve their competitiveness.

The first part of this report (strategic approach) draws together the issues and conclusions of the Intergraf workshop. It first presents an industry overview, the themes of a SWOT analysis by delegates, and then sets out some of the strategies that need to be considered and actions that need to be taken to not only survive, but thrive in the future. Finally, it summarises what delegates took back home to their businesses and countries as a result of the workshop.

The second part of this report (economic approach) contains the book market analysis commissioned by Intergraf for the book printing industry in September 2015. It presents an overview of European book printing markets and trends as well as future outlook.

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Strategic approach Industry Overview and Background

“The outlook for the European book printing industry is, for the most part, one of long-term decline” (Smithers PIRA report)

“My overall rating for the future of book publishing is a continuing modest decline in total sales volume, but certainly not an impending catastrophe.” (Thad Mcilroy – The Future of Publishing)

The Smithers PIRA study commissioned by Intergraf concluded with a look at the future. A Word Cloud may help us understand the most important conclusions, the words are taken from the report – the size indicates the number of mentions. Transferring the previous image into a sentence points us in the direction of the future: The book printing industry “may” conclude that whilst the “decline” of the last decade “may” continue there are “opportunities” for “growth” by “investing” in “digital” “technology” to embrace all “media” with the threat of offshoring “likely” to have peaked but recognising the ”major” “growth” of “electronic media”.

Analysis of the industry – SWOT

Workshop participants deliberated on the Strengths, Weaknesses, Opportunities and Threats present in the industry. The conclusions of this analysis are below (In order of importance, as identified by delegates).

STRENGTHS

People like to readProven productKnowledge of the marketKnowledge of technologyClose to market

WEAKNESSES

OvercapacityFragmented structure of the industryCost of investmentLack of marketing competence

OPPORTUNITIES

New digital technology Add value to supply chainAwareness of need to changeNew productsEcological argument

THREATS

Mature marketE-booksConservative customers (publishers)Competition in the entertainment marketLow cost competitionStatic nature of the printed productThe “big unknown”


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In any SWOT analysis, pairing Strengths/Weaknesses with Opportunities/Threats shows that we are looking at two sides of the same coin, where a strength has a strong correlation with a weakness. For example, a “knowledge of technology”, contrasts with the “cost of investment”. The same can be observed with opportunities and threats – the advantage of new digital technology” is contrasted with the perceived and on-going “threat of e-books”.

One conference delegate made the case for “realistic optimism” i.e. recognising that the industry and its traditional customers were in a declining market, but the advent of new printing technologies offered opportunities for dialogue with customers, adds value to existing products and allows development of new more profitable products. An example of this kind of technology is high-speed colour inkjet printing, which makes the shorter print-runs that customers require, possible. We learned that there are 500,000 new titles coming out each year, but run lengths are decreasing.

The Smithers PIRA report highlights the following statistics which further emphasise the above analysis. Although publisher’s revenues have fallen little up to now, they are forecast to decline approximately 16% in Europe’s major markets (UK, Germany and France) by 2020. This is slightly less than printers, whose revenues are expected to fall 26% in constant price terms over the same period. To fully understand the implications, three further statistics need to be considered. Evidence of the market’s decline is seen by the forecasted decline of 36% for book paper. However, the volume share of digital print is set to double to 5.1% by 2020 whereas the value of digital books produced will increase to 49.4% (from 31% in 2015). This indicates big potential revenues from digital print. This is illustrated by the following charts.

Western European Books 2020 259bnxA4

Western European Books 2020 €4.1bn

Other 1.5%

Offset litho 93.4%Offset litho 49.7%Digital 49.4%

Digital 5.1% Other 0.9%

Presentation: Trends in Book Printing in Europe - Dr Sean Smyth, Smithers PIRA. Delivered 28th September, 2015.

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Canon/Oce suggested 4 future business models in their presentation:

• Short run – switching existing output from offset to digital• Life cycle management – managing the risk for the customer to eliminate overstocking by

“automatic stock replenishment”• Print on Demand – allowing the customer to “sell first-print later”• Smart publishing – versioning and personalisation

All of these have the virtue of meeting customers’ new requirements but do however, require investment in digital printing.

The conclusion drawing from a combination of the SWOT analysis and the statistics, is that volume-printed books (produced by traditional offset technologies) will decline in all but best-selling fiction and coffee-table quality books, in favour of short run, just-in-time, digitally printed books, together with a continued use by publishers of electronic publishing.

Future Strategies and actions – issues and questions to consider

(See also Appendix 1)

TO SURVIVE

• Know your company and your customers > Analyse your cost base > Analyse your customer base for value > Demonstrate strong leadership. Develop clear plan and vision for the future with

motivated staff to achieve it

• Know your market > Decide which market(s) you are in > Are there new, more profitable markets? > Do you have a surprise specialism, an expertise?

• Know yourself and your management team > Right people/wrong roles > Wrong people/right roles > Are you a team or individuals?

• Develop a plan > Work on current problems > Build on strengths and analyse > Develop a vision


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TO THRIVE

• Establish a firm (maybe smaller) economic base – see “Survive”

• Market > Decide which markets are profitable > Which markets are you in? Which products and topics? (e.g. loose leaf in the sports

market) > If your market is impacted by forces outside your control (e.g. imports) join forces and

lobby through Intergraf > Is there a match between profitable markets and your markets? > If not, change > Make yourself an expert in your chosen markets > Put the customer and their changing needs and wants at the heart of your business > Understand the behaviour of your customer’s customer

• Technology > Analyse your current technology – does it match your chosen markets? > If not plan the migration to suitable technology – skills, budget etc. > Don’t forget the key role of automation – from front to back of the production process > Consider collaboration with other SMEs and share technology > Or revisit markets if technology not available or cannot be afforded > Remember, it’s not just about the technology – it’s the use of it

• The company > Develop a 1-3 year plan and budget – consider using the “What – Why – Who – When”

analysis technique > Develop a vision – e.g. “to integrate into my customer’s business and become their

chosen expert” > Do not invest in technology for its own sake – put customers’ needs first for a strong

business case > Build a team – from bottom to top. Unite behind the vision. Remember Belbin team roles

and Maslow’s hierarchy of needs.* > Your people – do they have the right skills for the new industry? If not how can you build

the new skills and ways of working required?


* “Motivation and Personality”, Abraham Maslow (1954) “Management Teams: Why they Succeed or Fail”, Meredith Belbin (1981)

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What will delegates take back to their countries and businesses?

Here’s a summary of what delegates said in the closing session - advice from the industry: > Be optimistic > Be brave – take difficult decisions > Leadership and teams matter for our future > Let’s get publishers and printers working better together > Let’s be as good as we can be in a challenging environment > Use the data – analyse the market segments > Understand ourselves – we are all different! Get others’ points of view > We need to invest > We need to working better together, share knowledge and ideas > We need to improve the image of the printing industry (traditional to modern) – key role

for Intergraf and national associations in helping with image change > Books are not going to die!

IN summary then, the conference brought people together from across Europe to discuss the future of the book printing industry, with the conclusions of a new report being presented setting out the facts and stats. There were also presentations on new technology, as well as how to get the best out of teams through strong leadership, open communications with staff, setting clear plans and expectations and managing performance well.

While the industry is certainly going through major change and there is no room for complacency. The traditional core business of book printing is in decline but there are also new emerging markets that we can, and must, respond to quickly and positively.

We ended optimistically. We are not dead, but do need to change how we do things, the markets we are in and the image of our business. We can and must do things differently and indeed do different things if we are to stay in tune with the new customer requirements for our sector.

Mike Hopkins and Fiona Narburgh, workshop facilitatorsOn behalf of Intergraf October 5th 2015


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The European Book printing and finishing industry – a strategy to survive and thrive

THE MARKET• Analyse the book industry • Analyse the (sub)market you are in• understand your customers’ market• study reading behaviours: what is read when, where and how (on which platform)• Understand the profitability of your different (sub)markets

TECHNOLOGY• Ensure your machinery and ICT matches market needs• Ensure your company has the necessary skills• If not invest or partner

SKILLS• Train your staff or recruit new staff• Build a team• Motivate the team• Or partner with another company

BE PROUD OF WHAT YOU HAVE ACHIEVED! SUCCESS!

MARKETING PLAN FOR THE FUTURE• Demonstrate that you are an expert in the customers’ market• “Live” in that market

LEADERSHIP• Ensure your leadership style is adapted to the vision• Ensure it is appropriate for team members

COMPANYLay out a vision for the future

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Economic approach Introduction

The second part of this report, which looks at the book market trends, was commissioned by Intergraf to Smithers Pira

Smithers Pira is the worldwide authority on packaging, paper and print industry supply chains. Established in 1930, the company provides strategic and technical consulting, testing, intelligence and events to help clients gain market insights, identify opportunities, evaluate product performance and manage compliance. Smithers Pira has worked on many projects in book printing and other printing markets, and has a wealth of market data, technical expertise and strategic insight to draw upon for this project. Book printing markets have regularly been covered in a number of global and European reports published by Smithers Pira.


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Methodology

Smithers Pira participated in a kick-off conference call with Intergraf to confirm the main objectives of the project at its outset. There then followed a three-stage process whereby the report and accompanying data was put together.

Stage 1 – research & analysisThis stage involved collecting and collating existing data Smithers Pira and other sources have published on European book printing markets, and undertaking analysis thereof. Data was taken from our own internal print databases, which cover printed output across 24 market segments by process type as well as associated machinery and consumables demand. Research was undertaken to confirm, update and where necessary amend our latest datasets. In summary, Smithers Pira consulted a number of sources, including:> Proprietary market data used for single-client work.> Smithers Pira market intelligence and technology studies.> Other secondary research sources including Eurostat and national statistics offices,

trade associations (e.g. Federation of European Publishers), market reports, journals and websites

> Industry contacts

Stage 2 – Delphi techniqueThe market data and trends featured in the report were re-assessed using the Delphi research technique. Smithers Pira’s forecasting unit, RADAR (Research, Analysis, Development and Review), consisting of print experts, examined the research findings in the light of their own expertise and also previous Smithers Pira printing research to ensure that the output was meaningful and sensible, identified key research findings and also contributed towards the final analysis and conclusions.

Stage 3 – final report Using data collated from the first three stages, Smithers Pira has provided a written report for Intergraf. This is made up of the following sections:> Introductory section outlining approach and methodology> Review of top-line book printing market trends by geographic market, plus forecasts

to 2020. This section also includes analysis of book publishing industry sales by sector (educational, academic/professional, children’s books and other consumer/trade books)

> Review of trends in book printing, as well as book printing output by substrate type> Analysis of key drivers and trends in book printing today including the rise in just-in-time

(JIT) delivery, impact of e-readers/other electronic media, offshore printing and> Outlook for the European book printing industry

Stage 4 – final presentationThis document forms in part the basis of Smithers Pira’s presentation on ‘Trends in European Book Printing Markets’, to be given at Intergraf’s book printers’ workshop in September 2015.

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FIGURE 1: European Book Printing Output, 2000-2020f

Note: constant price values show market data at 2014 prices, removing impact of inflation and exchange rate fluctuations from one year to the next / Source: Smithers Pira

10.0

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The European Book Printing Market

Structural changes in the book printing industry combined with falling readership, technological changes and a challenging macro-economic environment are fuelling declines in book printing output across Europe. Having peaked at around €8.2 billion in 2008, European book printing revenues have fallen year-in, year-out since that time with the growing influence of digital media leading to an entirely new market situation whereby economic recovery has not been matched by a similar recovery in printing industry revenues. In addition, technological changes have had a significant impact upon the book publishing supply chain, leading to reduced waste and inventory levels as publishers have increasingly ordered print runs and reprints on demand, in smaller quantities in order to limit production of books that are ultimately unsold and are eventually pulped. This trend is likely to continue, and this is likely to lead to further cuts in volume as publishers try to limit their costs.

Western Europe is seeing a faster drop in book printing output than Central & Eastern Europe, but even here changes in media consumption are leading to a fall-off in demand. In 2014, European book printing output was valued at €6.39 billion, a decline of 22% on 2008 levels, with a 3.5% decline forecast in current terms for the full year 2015 to €6.17 billion before falling by around 4% per annum in current terms to €5.02 billion by 2020.

€ billion, current prices & exchange rates

€ billion, constant (2014) prices & exchange rates

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During the course of the period 2015-2020, Western European book printing revenues are set to decline by 19% in current terms (26% decline in constant terms) with book printing revenues forecast to fall by 7% in current terms (21% in constant terms) in Central & Eastern Europe.

The UK is the single largest producer of books in Europe in value terms, with output valued at €1.18 billion in 2014, down from €1.35 billion (current prices) in 2010. Although domestic demand is lower than Germany, the UK has a very significant, high-value export business.

TABLE 1: European Book Printing Output by Country/Region, 2010-2020f (€ billion)

Country Current prices & exchange rates Constant (2014) prices & exchange rates*

2010 2014 2015p 2020f 2010 2014 2015p 2020f

Western Europe 7,153 5,950 5,759 4,641 7,736 5,950 5,629 4,182

UK 1,354 1,183 1,232 1,030 1,594 1,183 1,117 831

Germany 1,127 928 885 745 1,193 928 883 685

France 954 824 782 587 1,005 824 781 550

Italy 789 669 644 548 844 669 644 517

Spain 477 384 377 339 499 384 375 319

Sweden 459 384 337 236 492 384 347 208

Belgium 345 267 251 186 367 267 250 173

Netherlands 324 253 239 182 347 253 239 169

Norway 298 232 211 140 302 232 213 136

Austria 183 148 142 115 201 148 141 105

Switzerland 159 142 154 125 179 142 137 110

Denmark 163 126 119 91 172 126 118 84

Ireland 165 123 115 91 170 123 114 84

Finland 139 121 113 83 151 121 112 75

Greece 122 79 76 73 120 79 76 68

Portugal 64 63 60 55 68 63 61 51

Others 31 24 23 17 33 24 22 15

Eastern Europe 443 436 408 380 455 436 429 338

Russia 135 133 101 106 143 133 129 92

Poland 78 79 81 74 79 79 80 66

Czech Republic 58 58 57 45 56 58 57 47

Hungary 33 27 28 21 32 27 26 18

Romania 31 27 29 28 33 27 27 23

Slovenia 25 26 26 23 27 26 26 21

Ukraine 21 17 14 12 18 17 16 12

Bulgaria 11 11 12 11 12 11 11 9

Others 51 57 60 59 55 57 57 49

Europe 7,596 6,386 6,167 5,021 8,191 6,386 6,059 4,520

Note: constant price values show market data at 2014 prices, removing impact of inflation and exchange rate fluctuations from one year to the next / Source: Smithers Pira

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Book printing processes

A wide range of processes are currently employed in book printing today. Offset lithography remains the most common process, with smaller amounts of digital and then flexo (mainly covers), gravure and letterpress also employed.

Sheetfed offset has traditionally been used for shorter runs and high-quality printed books, with applications including covers, book jackets and colour sections for many books, with specialist large-format perfecting book presses widely used to print short to medium runs. This sector received a boost with the arrival of size VI (1.0m x 1.4m) large format colour perfectors with high levels of automation to make fast-changeover, full-colour book printing more efficient. Sheetfed book volumes are falling though, as more efficient alternatives are used. Coldset book printing remains very significant, employed across a range of diaries, religious, educational and trade fiction titles – both hardback and softback. Heatset is used to print long-run colour books; many book presses have heatset ovens that can be used for colour and switched off when the press is producing mono titles (often using two webs).Electrophotography first made its mark in book printing back in the 1990s with the Xerox Docutech making short-run mono books economic. It gradually increased share with continuous presses offering an alternative to litho, opening up print-on demand and long-tail operations and keeping more titles in print. It also opened up new opportunities, with self-publishing becoming a significant sector and some book printers offering author support with web-to-print to take files into templates, and providing services such as obtaining ISBN details, etc. Colour electrophotography is now increasingly used to print colour sections – particularly covers – as an alternative to sheetfed.

High-volume inkjet is being rapidly adopted by book printers across the world as supply chains develop to print smaller batches quickly and economically. High-speed inkjet presses, linked to sophisticated slitting, cutting and folding finishing systems, are now allowing the economic production of mono and colour titles, either as book blocks or folded sections. The economic crossover (where litho cost is lower than inkjet) is approaching a run of 10,000 for mono and in the thousands for colour titles. The combination of high-volume printing with highly automated finishing has changed the economics and response times for book production and consequently traditional publishing supply chains. There are also possibilities to produce new types of books – for example course-specific textbooks for university courses that mix standard sections of textbooks with specialist course notes.

Despite the emergence of more cost-effective digital printing solutions, it still remains the case that analogue printing processes predominate in volume terms, with digital printing accounting for only around 2.0-2.5% of European book printing output today. However, in value terms digital printing accounts for around 30% of output, a figure that is set to rise still further over the next five years as average pricing falls and volume share begins to exceed 5%. The share of electrophotography in volume terms is likely to remain small as it loses mono on-demand/short-run share to inkjet, but its value shares is set to rise significantly as it is used more for full-colour printing of books including book covers. Inkjet’s volume share is forecast to treble to almost 4.5% by 2020, picking up mono output from electrophotography as well as a certain amount of colour work.

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FIGURE 2: European Book Printing Output by Process, 2010-2020f (€ million, current prices & exchange rates)

The decline in European book printing output has been going on since the recession in 2007/08. The uncertain economic situation since that time has had some impact upon the book printing industry, but the rise of digital media is leading to a situation where demand for the printed book would appear to be in long-term decline.

3,000

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Sheetfed offset litho

Heatset (web)

offset litho

Coldset (web)

offset litho

Other analogue

Electro-photography

Inkjet

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2014

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Source: Smithers Pira

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Book printing substrates

This trend has had a particular impact upon paper demand. Standing at almost 1.90 million tonnes in 2000 for finished books (a figure that would be around 10% higher including waste from trimming, etc.), book printing output declined to around 1.65 million tonnes in 2010 before falling to around 1.2 million tonnes in 2014, and this figure is forecast to decline further to around 773,000 tonnes by 2020. European paper producers are regularly reporting declines of around 5% per annum in key grades, and declining demand from the book printing industry is one of the major drivers. Demand today is mainly accounted for by three grades – coated woodfree for full-colour books (38%), uncoated mechanical for paperbacks (30%) and uncoated woodfree, mainly for paperbacks (23%).

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Uncoated woofree 22.8%

Coated mechanical 8.3%

Uncoated mechanical 30.1%

Coated woofree 38.0%

Other 0.7%


FIGURE 3: European Book Printing Output, 2000-2020f (‘000 tonnes)

FIGURE 4: European Book Printing Output by Substrate, 2014 (% share by volume)

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Book publishing industry trends

Book publishers in most European countries are represented by the Federation of European Publishers (FEP), comprising 28 national associations of publishers in the EU and EEA. The combined membership accounts for more than 80% of publisher revenues and titles in the region. Overall employment by publishers represented by the FEP amounted to around 130,000 in 2013, generating combined revenues of €22.3 billion from both printed and digital books, but excluding revenues from selling rights for translation, audiovisual adaptation, etc.

After a slight recovery in book publishing revenues in 2010 as most European countries emerged from the depths of recession in 2009, the trend since that time has been one of genteel decline, and this has been a feature of all major book publishing markets, led by Germany and followed by the UK, France, Spain and Italy. At the same time, the number of new titles has increased year-on-year, and the number of active titles in print has grown massively in line with changes in book printing practises with the emergence of on-demand digital printing. However, while digital printing has had a positive impact upon publishers’ printed book sales, the e-book market has grown to take a significant share of revenues, estimated at around 4-5% in 2013.

Book publishing industry sales across key sectors have followed similar trends, with educational and children’s books gaining share from academic/professional and other consumer/trade books. The adult trade sector continues to account for the largest share at around half of all publisher revenues.

TABLE 2: European Book Publishing Statistics, 2009-2013

2009 2010 2011 2012 2013

Number of persons in full-time employment in book publishing

135,000 135,000 135,000 130,000 130,000

Publishers’ revenue from sales of books (€ billion) 23.0 23.5 22.8 22.5 22.3

SALES BY SECTOR (% SHARE BY VALUE)

Educational (school) books 17.6 17.9 18.7 19.8 18.8

Academic/professional books 20.0 20.5 19.5 19.7 19.5

Consumer (trade) books 50.5 49.6 49.8 48.7 49.5

Children’s books 11.9 12.0 12.1 11.8 12.3

SALES BY AREA (% SHARE BY VALUE)

Sales in the domestic market 84.4 81.5 80.5 79.6 81.0

Exports 15.6 18.5 19.5 20.4 19.0

SALES BY DISTRIBUTION CHANNEL (% SHARE BY VALUE)

Trade (retail and wholesale) 79.5 78.0 80.9 80.2 79.3

Direct 14.9 16.3 13.1 15.1 17.2

NUMBER OF TITLES PUBLISHED IN PERIOD

New titles 515,000 525,000 530,000 535,000 560,000

Number of titles in print (active catalogue) 6,400,000 7,400,000 8,500,000 9,000,000 16,000,000

Source: Federation of European Publishers (FEP)

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Key drivers and trends

A number of factors have had a significant impact upon the development of the book printing industry in the EU in recent years, and in many cases the impact of these is likely to become exacerbated as time goes on. The growth in electronic media is probably the single most significant factor, but changes in book printing practises including the adoption of just-in-time (JIT) delivery facilitated by digital print are also important. Other trends such as the growth in offshore printing have also had an impact, particularly with the emergence of China as a major source of printed books during the past decade.

Impact of e-readers/other electronic media

The book publishing industry has generally been quite successful in adapting to digital media with the adoption of the Kindle and similar readers. However, digital communications have had an impact here, with online information sources leading to lower demand for technical and educational books, and the broader range of media options leading to book readership levels declining in most countries, particularly in younger age groups.

The convenience of e-readers has been a major factor behind their success. While a large number of consumers may continue to profess a preference for the printed book, even among this group many will also have an e-reader that they will find more convenient to use when commuting and travelling abroad. Although these devices are still lagging behind the US in terms of popularity and market share, the share is growing quickly and is probably now in excess of 10% as we move towards the end of 2015. In the UK, e-book sales are now pretty much on a par with printed book sales, with the Fifty Shades trilogy having a significant boost on overall sales in 2014 and Amazon in particular benefiting from this trend.

It should be added that some publishers are only now releasing books on digital platforms in the form of e-books, primarily to piracy concerns as the technology was developed. The strong uptake of e-books in the UK has generally not been replicated in other European countries, with the exception of certain Nordic countries, and uptake remains relatively low in the key German market. Nevertheless, it is clear that demand will continue to grow for e-books, and this is likely to lead to further pressure on the printed book over the remainder of the current decade and beyond.


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Just-in-time (JIT) delivery and shorter print runs

The implementation of more efficient printing technology, such as on-demand digital printing, is leading to reductions in waste and inventory costs in the book publishing industry. Trends towards shorter runs and just-in-time (JIT) delivery requirements by publishers are now leading to more print jobs going to local digital printing establishments, many of which (but not all) have succeeded in lowering inventory and turnaround costs.

Changes in ordering practises have led to reductions in average run length, with increasing frequency of orders for popular titles facilitated by the lower set-up costs afforded by digital printing. Waste reduction and the elimination of unsold copies have also been achieved through improved demand forecasting.

Digital print has also enabled publishers to keep all titles in print and available for purchase, benefitting from the long-tail of their lists. There is also the burgeoning self-publishing sector, where individual authors can market and sell their work on-line, with physical books printed on demand to fulfil and order, and are then despatched by the printer.

Digital printing

Digital printing is becoming increasingly well-established, helping publishers adopt more efficient supply chains, and reduce average book run lengths. Growth is now focused on two main areas: colour electrophotography for covers, jackets and colour plates/coated mono illustrations; and mono inkjet for text printing, with inkjet set to also take share in colour book printing in the short-medium term. In fact, inkjet for text production is being adopted more rapidly than expected.

Some key applications for digital book printing are as follows:> Full-colour laser printing for book covers & jackets> Increasing use of laser printing for colour plates in books (coated pages for photographs,

pictures & other illustrations)> Short full-colour runs of specialist art books and travel titles, principally favouring laser

printing in the near term> On-demand printing to reduce capital tied up in stock, prevent over-printing and allow for

quick reprints in areas like university press, literary fiction, some non-fiction titles > Reprints across a range of titles including textbooks, and also popular books with a long

tail such as general non-fiction> Short-runs of technical and other specialist non-fiction> Short-runs of legal and other professional print where regular updates are common> Short-runs for self-publishing> Limited customized printing for workbooks and possibly religious texts


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In addition to the list above, Pearson has developed new textbooks for legal courses that on the one hand comprise standard material, and on the other include content more tailored to a particular course at a particular educational institution. Printed using inkjet, in some cases these feature content written by an individual tutor/lecturer for a class.

There have been a number of key moves of late that have increased the focus on digital book printing. Timsons exited web offset press manufacture for books recently to concentrate on digital book finishing (and initially presses, but latterly discontinued). More recently, at the beginning of the year it was reported that Quad/Graphics has bought 20 of HP’s most productive colour production inkjet web presses, albeit mainly for use in North America. These lines incorporate front-end workflow solutions for accepting orders and putting them immediately into production, as well as back-end integrated systems for finishing, distribution and fulfilment, including shipping directly to the end recipient with an auto-generated invoice. This particular investment created a big stir, clearly indicating Quad’s intention to take a leading share in inkjet book printing at the same time as indicating a certain amount of confidence that it could take share in areas currently dominated by offset.

HP is already a key player in digital book printing through its T Series inkjet line, and also in electrophotography through the HP Indigo 7000 series and 10,000 series for covers and colour books. Screen, Ricoh and Oce are also strong in book printing through its inkjet press lines, in most cases incorporating book finishing systems able to gather/bind inline.


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Offshore and nearshore printing

One of the most significant developments in global printing over the past decade and more has been the emergence of China as a major source of low-cost printed books alongside other print products such as greeting cards. China today is the single largest source of imported books in the EU in volume terms at around 145,000 tonnes in 2014 out of overall book imports of 736,000 tonnes, up from just 26,000 tonnes in 2000. In volume (tonnage) terms, China’s share of book imports stood at 5% in 2002, and this figure rose to 20% in 2012 before falling back to around 18% in each of the last two years and the first quarter of 2014. In addition, there Hong Kong also ranks highly in the rankings as a source of imported books, and the vast majority of these are re-exports of books sourced from China and then shipped onto Europe.

In value terms, however, China still only ranks fourth behind Germany, the UK and US, and it should be noted that – despite China’s emergence – the value share of imported books from outside the EU in EU countries actually fell from 37% in 2013 to 33% in 2014, and this figure stood at 36% in both 2000 and 2005. In volume terms, the share has been steady of late at around 37%, up from 32% in 2000 and 31% in 2005, but down from 40% in 2010. It is possible that the trend towards on-demand printing has helped stabilise EU printers’ share of the trade in books, due to the impracticality of sourcing some reprints from far afield when deadlines are short. In the view of Smithers Pira, it is quite possible that the trend towards offshoring has worked its way through, and although China and other countries outside the EU will remain significant sources of printed books, their share may not grow further.

It should be said that the impact of offshoring has varied from country to country, and has been most significant in the UK, the EU’s largest importer of books in both volume and value terms at 196,000 tonnes in 2014, value at €1.03 billion.

FIGURE 5: Non-EU and Chinese share of EU book imports, 2002-Q1 2015


45%

40%

35%

30%

25%

20%

15%

10%

5%

0%

% s

ha

re b

y vo

lum

e (t

on

nag

e)

Source: Eurostat/UN

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

Q1

2015

Non-EU, overall

China

26

The impact of nearshoring, meanwhile, has perhaps been understated. The share of EU imports from Central & Eastern European countries (including EU members, particularly Poland the Czech Republic) has grown strongly over the years, from a 4% value share in 2000 to 16% during the first three months of 2015 (up from 9% in 2014), although volume share has been steadier, now standing at around 13% versus 12% in 2000 and down from 16% in 2010.

As mentioned previously, export markets remain important for book printers in some countries, especially the UK, with book shipments out of the country valued at €1.73 billion on volume of around 125,000 tonnes in 2014. Germany ranks ahead of the UK in volume terms with shipments of around 166,000 tonnes (€1.15 billion), with France, Spain (a significant Latin American export business) and Italy among the other leading exporters. Overall EU book exports in 2014 were actually at a similar level to 2000 at €5.42 billion versus €5.33 billion 14 years ago; over the same period the value of imports rose from €3.96 billion to €4.34 billion, an increase of just 10%.

TABLE 3: EU-28 Book* Imports by Source Market, 2000-Q1, 2015 (€ million)

2000 2005 2010 2013 2014 Q1, 2015

EU-28, total 3,955 4,030 4,141 4,077 4,336 1,115

Intra-EU 2,543 2,729 2,661 2,585 2,885 745

Germany 491 613 661 632 777 187

UK 563 616 571 605 649 155

France 206 219 236 272 261 58

Italy 282 237 250 225 210 44

Netherlands 229 240 204 187 174 36

Poland 26 25 62 65 171 127

Spain 127 196 122 97 103 26

Belgium 186 184 186 130 98 22

Czech Republic 33 57 66 59 81 18

Other EU 401 343 303 313 361 73

Extra-EU 1,412 1,301 1,480 1,493 1,451 370

US 698 481 456 559 530 153

China 115 277 452 446 434 93

Hong Kong 164 137 187 166 168 48

Switzerland 109 84 72 70 73 16

Singapore 94 91 75 37 36 8

Other extra-EU 231 231 239 215 209 52

Note: * excludes dictionaries and encyclopaedias; unbound books / Source: Eurostat


27

TABLE 4 EU-28 Book* Imports by Source Market, 2000-Q1, 2015 (‘000 tonnes)

2000 2005 2010 2013 2014 Q1, 2015

EU-28, total 633.2 795.4 864.7 753.9 735.7 156.7

Intra-EU 431.4 547.8 529.1 475.7 466.7 98.3

UK 46.7 74.4 77.8 54.6 90.7 9.9

Germany 76.7 121.8 121.8 94.3 88.5 21.1

Italy 71.4 79.5 86.1 79.4 76.9 21.2

Spain 44.6 86.8 64.3 41.1 33.5 7.4

Poland 15.2 13.9 23.3 26.1 32.1 8.0

France 26.2 27.1 25.7 29.8 23.0 5.2

Czech Republic 12.1 20.9 19.0 17.3 16.7 4.4

Belgium 34.3 28.9 27.9 18.6 16.6 2.6

Netherlands 18.2 23.6 20.1 16.7 15.7 3.4

Other EU 85.9 71.0 63.1 97.7 73.0 15.1

Extra-EU 201.9 247.7 335.6 278.2 269.0 58.4

China 25.9 82.5 145.6 138.1 133.8 28.5

Hong Kong 41.2 38.7 66.5 51.5 49.5 10.7

US 60.1 49.0 45.8 38.7 35.8 8.2

Singapore 23.9 26.2 24.6 10.8 10.3 1.9

Switzerland 9.4 6.5 4.5 3.5 3.1 0.9

Other extra-EU 41.4 44.8 48.6 35.7 36.5 8.2



28

Finally, it should be noted when examining statistics on book imports and exports that there is a mix in terms of point of supply chain at which values are provided. Some books are priced at the printer level, while others are priced at the publisher levels and this to some extent explains the differences in average pricing between countries.

TABLE 5: EU Book* Imports by Country, 2000-Q1, 2015 (€ million)

2000 2005 2010 2013 2014 Q1, 2015

EU-28 3,954.7 4,029.9 4,141.0 4,077.4 4,335.9 1,115.3

UK 1,015.8 950.2 899.5 1,032.9 1,025.9 253.2

Germany 541.7 484.4 475.8 508.1 638.5 224.0

France 448.4 546.9 615.8 590.8 572.4 129.6

Spain 156.1 182.2 197.9 189.8 363.1 50.6

Austria 265.7 367.9 412.8 369.0 342.1 86.2

Belgium 328.3 319.3 343.5 311.9 311.3 68.0

Italy 144.0 147.2 141.4 140.8 164.0 37.2

Netherlands 252.2 193.7 209.3 186.7 133.3 27.0

Sweden 158.8 135.3 114.2 133.9 125.0 29.3

Poland n/a 75.9 61.0 60.9 105.4 86.1

Denmark 112.1 100.0 97.5 94.7 93.4 20.8

Czech Republic 42.9 51.8 82.3 77.7 80.9 18.8

Ireland 114.5 140.1 105.6 78.9 76.5 17.4

Finland 50.4 46.0 70.8 50.4 50.0 13.4

Slovakia n/a 22.3 27.8 38.6 40.6 7.1

Luxembourg 16.1 28.2 32.9 36.3 35.8 7.5

Portugal 47.6 47.8 43.6 28.7 33.3 6.8

Greece 57.6 57.7 60.3 38.4 32.9 7.7

Slovenia 7.9 9.7 16.9 25.2 30.2 9.4

Romania 8.7 15.7 40.1 17.9 17.8 4.0

Hungary 25.1 40.2 32.6 19.1 14.1 2.7

Cyprus 13.7 15.0 17.3 11.1 11.6 1.6

Croatia 7.1 19.4 11.2 7.7 9.3 1.2

Estonia 12.7 6.4 5.7 6.8 7.8 1.4

Latvia 5.8 8.9 6.9 6.0 7.2 1.3

Lithuania 4.7 6.7 4.8 4.4 5.2 1.2

Bulgaria 3.1 7.9 8.9 5.6 4.4 1.3

Malta 10.6 3.2 4.5 5.0 3.9 0.6



29

TABLE 6: EU Book* Imports by Country, 2000-Q1, 2015 (‘000 tonnes)

2000 2005 2010 2013 2014 Q1, 2015

EU-28 633.2 795.4 864.7 753.9 735.7 156.7

UK 166.7 223.2 232.0 201.3 195.8 44.6

France 92.6 164.4 189.2 151.8 149.9 30.4

Germany 93.0 105.9 104.6 101.5 97.1 25.1

Belgium 31.0 37.8 43.9 30.9 34.1 7.5

Austria 29.7 44.7 45.5 34.7 33.7 7.8

Spain 17.3 22.0 29.9 26.8 33.5 6.2

Netherlands 44.6 38.2 40.9 37.6 32.6 6.6

Ireland 10.5 13.1 9.7 8.0 23.6 1.6

Czech Republic 12.4 16.0 27.1 21.1 21.1 2.6

Sweden 25.7 22.8 22.4 20.4 19.6 4.1

Poland n/a 23.7 18.7 18.8 17.1 6.1

Italy 23.4 24.4 19.6 17.4 16.8 3.8

Slovakia n/a 2.3 5.0 35.4 10.0 1.0

Denmark 17.3 14.4 13.3 10.5 9.1 1.7

Slovenia 0.7 1.3 2.5 4.6 6.3 1.5

Finland 6.2 5.8 9.3 6.4 5.9 1.4

Croatia 1.2 3.4 1.7 1.1 5.4 0.4

Greece 6.9 6.6 12.1 5.2 4.2 0.8

Romania 1.8 3.4 12.9 4.1 3.9 0.8

Portugal 7.5 5.4 5.7 3.8 3.7 0.8

Luxembourg 1.2 2.6 2.4 3.9 3.7 0.6

Hungary 7.3 6.7 9.7 3.9 3.3 0.8

Cyprus 1.2 1.4 1.8 1.0 1.2 0.1

Latvia 1.9 1.2 1.0 1.0 1.2 0.1

Estonia 2.6 1.1 0.8 0.9 1.0 0.2

Malta 0.0 0.3 1.2 0.4 0.7 0.1

Bulgaria 0.4 2.2 1.0 0.7 0.6 0.1

Lithuania 0.9 1.1 0.8 0.5 0.6 0.1



30

TABLE 7: EU Book* Exports by Country, 2000-Q1, 2015 (€ million)

2000 2005 2010 2013 2014 Q1, 2015

EU-28 5,325.7 5,395.0 4,999.2 5,167.9 5,415.9 1,362.6

UK 1,675.5 1,581.1 1,496.1 1,639.9 1,732.7 401.1

Germany 865.2 1,019.7 1,056.7 1,051.1 1,150.4 292.9

France 497.6 500.2 565.5 581.9 583.9 130.4

Spain 714.0 598.9 395.5 382.8 398.1 94.2

Italy 446.7 393.8 395.1 361.6 367.3 69.9

Netherlands 248.4 225.1 188.3 198.4 186.8 37.7

Poland n/a 111.2 101.7 102.0 164.2 147.1

Belgium 300.9 278.4 171.6 158.5 128.9 28.1

Czech Republic

35.8 77.4 101.4 108.3 127.3 27.1

Latvia 0.8 6.8 33.9 56.2 59.5 14.5

Austria 81.3 57.7 66.3 53.8 54.6 12.4

Sweden 95.4 82.2 83.2 58.6 50.9 13.3

Slovakia n/a 44.6 53.1 48.8 49.2 14.7

Denmark 99.3 84.9 49.5 55.5 48.5 13.1

Slovenia 32.8 57.6 37.5 49.3 46.5 9.7

Others 232.0 275.4 203.8 261.2 267.1 56.4



31

TABLE 8: EU Book* Exports by Country, 2000-Q1, 2015 (‘000 tonnes)

2000 2005 2010 2013 2014 Q1, 2015

EU-28 805.5 942.2 839.5 768.2 809.8 179.3

Germany 118.9 167.0 163.6 142.0 165.5 34.7

Spain 151.0 170.4 116.8 102.2 125.4 29.4

UK 126.3 171.5 138.5 119.8 124.5 25.1

Italy 134.7 139.3 135.7 120.0 117.5 20.9

Poland n/a 34.7 40.6 39.9 46.7 14.0

France 54.8 58.5 52.0 44.4 41.1 9.2

Czech Republic 13.4 33.3 30.3 29.5 26.0 5.9

Slovakia n/a 17.3 20.7 19.1 20.9 6.4

Latvia 0.3 1.9 12.0 18.8 20.3 4.9

Belgium 57.3 46.4 26.2 23.9 15.9 3.6

Netherlands 20.2 14.4 19.6 18.1 15.4 3.7

Slovenia 12.4 18.9 10.9 13.6 14.0 3.2

Lithuania 0.4 1.4 6.5 9.6 10.5 2.6

Romania 0.2 0.9 2.1 5.8 8.6 1.7

Portugal 4.9 8.2 8.3 8.6 8.4 1.0

Others 110.7 58.1 55.7 52.9 49.1 13.0



European book printing industry outlook

The outlook for the European book printing industry is for the most part one of long-term decline. There is no doubt that demand for physical books will continue to fall, partly due to the growth in e-readers and other electronic devices such as tablets, partly due to declining book readership in the face of the increasing amount of time devoted to competing media including electronic media – at home but also in the classroom and workplace – and partly due to changes in the book publishing supply chain, facilitated by printing technology amongst other things. This long-term trend is common to consumers and industry in both Western European countries as well as Central & Eastern European countries; although in the latter it is likely that revenues will decline more gradually in the short-medium term. The book publishing industry will seek out opportunities in e-books at the same time as looking to expand internationally, in some instances perhaps shoring up exports of books in English and Spanish languages, but this is not likely to make up for lost sales more locally.

It is likely that a number of book printers and also general commercial printers to some extent reliant on book orders will go out of business, and there will be further moves towards consolidation. However, it is likely that the growth in digital printing will make local sourcing more attractive, and we would not anticipate any significant growth in offshore printing over the coming years, and it may even be that the share of imported books may actually decline in the EU as priorities shift towards more shorter runs and reprints with just-in-time delivery.

For some book printers, then, there are opportunities going forward arising from the adoption of digital printing technology, but the scale of investment required here is often very large and, as with Quad/Graphics in the US, there are likely be major moves that could have a major consolidating effect. However, such major investments now could be risky given the pace of development in inkjet printing technology in particular, especially given the possible potential of new Landa lines. For small to medium-sized printing concerns, the key may be to adopt smart digital printing practises that rely on the use of existing lines in combination with specialty digital printing papers to achieve top quality, as well as smaller investments in web-to-print and similar technologies.


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2015 Intergraf European Book Market Report · 6 2015 INTERGRAF EUROPEAN BOOK MARKET REPORT In any SWOT analysis, pairing Strengths/Weaknesses with Opportunities/Threats shows that